Donee beneficiary

A party makes certain contracts with another, and the performance of such a contract will benefit the 3rd party. The beneficiary of a third-party contract can either be a creditor or a donee (as per 3rdt party contracts in Texas).

For example- A person can benefit by depositing funds in a joint account with the right of survivorship in the name of the depositor (the donor) and another (the donee).

In a joint tenancy of estate, the deceased tenant's interest does not pass to the survivor; it ceases to exist. Hence, the property advisor may recommend forming such joint tenancy of account to help the donor avoid inheritance tax (in the US state of Texas).

Depending on the jurisdiction and the various related facts, a court can categorize such gains into a gift, trust, joint tenancy and contract. 

The contract allows the surviving donor to take the entire account upon the donor's death. In such conditions, the court requires the donor to give the proceeds of the account to the donee, and necessary terms should be inferred from the facts.

To analyze different approaches used to allow the donee's recovery, one can use different methods like -

• Trust – The depositor can create a trust to retain the donee's rights to the joint account. The validity of such savings bank trust does not depend upon the beneficiary's knowledge of the account or delivery of the passbook to the donee. However, both notice and delivery are evidence of the donor's intent to create a trust.

• Gift – Most jurisdictions judge the donor's deposit to the joint account by the gift or present standard. The donor must manifest his intention to make the gift of the property; however, in certain conditions, the joint account form alone can provide the least presumptive evidence of the donor's intent.

• Joint Tenancy – The parties can apply for joint tenancy reference where the court determines if the donatives intention exists or the account has been created merely as a convenient arrangement to pay the donor's funeral expense.

• Contract – Such investment strategies can enforce the donee's rights to the funds deposited where the court holds that the donee derives their interest in the account through the execution of the deposit contract.

A person can be a third-party donee beneficiary when the promise (the donor) contracts with the promisor (the bank) to have performance rendered to the donee, hence, conferring a gift upon the donee.